How much are you willing to pay for higher education?

IOUWith A-Level results released next Thursday, it looks set to be a tough ride for the thousands of people who have applied to university for the coming academic year. With even more barriers to overcome, and even more costs to factor in, the big question is: how much are students willing to pay for higher education?

The first hurdle to leap over is actually securing a place at university.  We all know that this year has seen record numbers of university applicants, following a trend of eager teens on the quest to continue their studies (or delaying their entrance into the real world of work).  If they do manage to secure a university place, then two more giants need overcoming.

Student debt.  For the lucky few out there, student debt is not a major concern.  However, for the majority of university students and graduates, student debt forms a menacing black cloud that stands as a threat to the financial stability of themselves and their families.  New figures have now been released by online university guide Push which estimate university starters of 2010 will have to endure up to £25,000 worth of debt when they finish their degrees.  The average amount of debt accrued per year has risen by 5.4 per cent, with some universities costing even more; Goldsmiths, University of London, expect their graduates to leave with an average debt of £36,638, while London’s Central School of Speech and Drama graduates bid their university farewell with an IOU of £38,071.

Push editor Johnny Rich is right in his concern that “many talented potential students may shy away when they hear a degree will cost £25,000”, though there are means to support students through their years of tough budgeting, aside from the bank of mum and dad.  The Student Loans Company is a UK public sector organisation established to provide financial support to over one million students annually across the UK.  In theory, this should induce a sigh of relief from many a student-to-be, but beware the woes of applying for a student loan!  It may not be as peachy as it should be.

Thousands of students will shudder at the mere memory of last year’s student finance fiasco; by the start of the 2009 academic year the Student Loans Company had processed a mere 43 per cent of applications, forcing many to simply hold tight and ‘manage’ for a number of weeks at university without any financial support.  The company are looking to avoid a similar situation this coming year, beginning with the appointment of Ed Lester as the interim chief executive.  Under his leadership, 63 per cent of applications have already been approved. Of those outstanding, 103,000 require applicants to provide further information, while a further 37,000 have been classified as “works in progress”.  Despite Mr Lester’s efforts, including hiring more than 520 additional staff to deal with telephone enquiries and to process applications, he has already stated that “it may be uncomfortable for a week or two” come September.  Is it too cynical to presume that the word ‘uncomfortable’ was deliberately ambiguous? Perhaps Lester wanted to dissuade  students from rashly deciding to forfeit their place for fear of not being able to survive financially.

The question remains: is a university degree enough of an investment to persuade the masses into thousands of pounds worth of debt?  According to a spokesman for the Department for Business, Innovation and Skills, “graduates on average have better employment prospects and can expect to earn at least £100,000, net of tax, more than non-graduates across their working lives.”  Perhaps it is worth feeling uncomfortable after all.